Ordinance No. 8,443981112 -3
ORDINANCE NO. 8443
® AN ORDINANCE OF THE CITY COUNCIL'OF THE CITY OF BAYTOWN,
TEXAS, PROVIDING FOR THE TRANSFER OF THE BAYTOWN, TEXAS,
CABLE TELEVISION FRANCHISE AGREEMENT FROM TCI
CABLEVISION OF TEXAS, INC., TO TEXAS CABLE PARTNERS, L.P.;
PROVIDING FOR A CHANGE IN ACTUAL WORKING CONTROL FROM
TEXAS CABLE PARTNERS, L.P., TO TIME WARNER CABLE; PROVIDING
FOR A CHANGE IN CONTROL FROM TELECOMMUNICATIONS, INC., TO
AT &T CORP.; IMPOSING CERTAIN CONDITIONS FOR CONSENT;
PROVIDING FOR OTHER MATTERS RELATED TO THE SUBJECT; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, TCI Cablevision of Texas, Inc. (the "Franchisee ") owns, operates and
maintains a cable television system (the "System ") in the City of Baytown, Texas (the
"Franchising Authority ") pursuant to Ordinance No. 8172, dated January 22, 1998, and
Ordinance No. 8113, dated October 23, 1997 (collectively the "Franchise ") and the Franchisee is
the duly authorized holder of the Franchise; and
WHEREAS, Time Warner Entertainment- Advance/Newhouse Partnership ("TWE -
A/N"), a New York general partnership two- thirds owned by Time Warner Entertainment
Company, L.F. ( "TWE "), an affiliate of TWE -A/N (together with TWE -A/N, the "Time Warner
Partners "), two affiliates of the Franchisee (the "TCI Partners ") and Texas Cable Partners, L.P., a
Delaware limited partnership owned 50% by the Time Warner Partners and 50% by the TCI
Partners (the "Partnership "), are parties to that certain Contribution Agreement dated as of June
23, 1998, (the "Contribution Agreement ") which provides for the transfer of the System and the
Franchise to the Partnership (the "Transfer," which term shall include any necessary transfers of
the System and Franchise through one or more affiliates of the Franchisee) at the closing
contemplated by the Contribution Agreement (the "Closing); and
WHEREAS, at the Closing, the Partnership will enter into a Management Agreement
with Time Warner Cable, a division of TWE, providing for the management of the Partnership,
the System and the Franchise by Time Warner Cable (the "Change in Actual Working Control ");
and
WHEREAS, AT &T Corp., an affiliate of AT &T Corp., and Tele- Communications, Inc.,
( "TCI ") are parties to an Agreement and Plan of Restructuring and Merger dated as of June 23,
1998, (the "AT &T Merger Agreement ") which provides for AT &T Corp. acquiring control of
TCI, the ultimate parent of the Franchisee and each TCI Partner at the closing contemplated by
the AT &T Merger Agreement (the "TCI Change of Control "); and
WHEREAS, the Franchisee and the Partnership have requested consent by the
Franchising Authority to the Transfers and, if applicable, the Change in Actual Working Control
and the TCI Change of Control, which will in each case be in accordance with all of the
® requirements of the Franchise; and
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WHEREAS, each of the Transfers and, if applicable, the Change in Actual Working
Control, and the TCI Change of Control will not adversely affect cable services to subscribers
within the City of Baytown and will not be contrary to the public interest; NOW THEREFORE
BE IT ORDAINED BY THE CITY. COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the facts and matters set forth in the recitals of this Ordinance are
hereby found to be true and correct.
Section 2: That subject to the conditions enumerated in Section 3 of this ordinance,
the Franchising Authority hereby consents to the transfer of the Franchise to Texas Cable
Partners, L.P., a Delaware limited partnership owned 50% by the Time Warner Partners and 50%
by the TCI Partners (including, if applicable, the Change in Actual Working Control from Texas
Cable Partners, L.P. to Time Warner Cable, a division of TWE, and, if applicable, the TCI
Change of Control from Tele- Communications, Inc., to AT &T Corp.).
Section 3: The Franchising Authority's consent to the Transfer and the Change in
Actual Working Control, is expressly conditioned upon and subject to the Partnership's
agreement that:
(a) The Franchise Authority shall have the authority to regulate the basic service tier,
equipment, and installation rates of the Partnership;
(b) The Franchise Authority shall have the authority to collect any underpayment of
franchise fees from the Partnership;
(c) The Franchise Authority shall have the authority to, and shall not be deemed to
have waived the right to, pursue and/or resolve any and all outstanding rate
matters;
(d) The Franchise Authority shall have the authority to require strict compliance with
any and all terms of the Franchise;
(e) The Franchise Authority shall have the authority to consider during franchise
renewal proceedings, to the extent permitted under Title 47, Section 546 of the
United States Code, the past performance of the Franchisee as if it were the past
performance of the Partnership;
(f) The Partnership shall assume all obligations and liabilities under the Franchise
accruing prior to and after the date of the Closing of the Contribution Agreement
(the "Closing Date ");
(g) The Partnership or any entity acting by, through or on behalf of the Partnership
• (collectively the "Partnership Entities "), shall give prior written notice to the City
of its intent to seek approval from the Federal Communication Commission
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( "FCC ") to include the Franchising Authority within the provisions of that certain
Social Contract for Time Warner, FCC Memorandum Opinion and Order No. 95-
478, adopted and released November 30, 1995 (the "Social Contract "). Such
notice shall be delivered to the Franchising Authority no less than forty -five (45)
days prior to the Partnership Entities submitting a request for approval to the FCC
to include the Franchising Authority within the provisions of the Social Contract
and shall inform the Franchising Authority of its right to submit comments or
objections to the FCC. Any request to the FCC by the-Partnership Entities, to
bring the Franchising Authority within the provisions of the Social Contract shall
expressly include a request that the FCC not take action on such request for a
period of thirty (30) days to allow the Franchising Authority an opportunity to file
comments or objections. The request shall include a certification that the
Franchising Authority was served a copy of the request. Unless otherwise
directed by the Franchising Authority, any such request for approval to include
the Franchising Authority within the provisions of the Social Contract shall be
conditioned on, and specifically request, FCC consent for Section III.B. of the
Social Contract to be inapplicable as to the Franchising Authority, thereby
allowing the Franchising Authority to continue to exercise full regulatory
authority over cable equipment rates, to the extent permitted by applicable law.
The Partnership Entities shall not enforce or exercise any rights against the
Franchising Authority, or be subject to any obligations other than notice
requirements to the Franchising Authority, under the provisions of the Social
Contract unless and until the FCC issues an order including the Franchising
Authority under the terms of the Social Contract, and unless otherwise directed by
the Franchising Authority, ordering that Section III.B. of the Social Contract is
inapplicable as to the Franchising Authority, thereby consenting to allow the
Franchising Authority to continue to exercise full regulatory authority over
equipment rates as permitted by applicable law. Nothing contained in this
paragraph or this Ordinance shall be construed as, or deemed to be, a waiver of
the Franchising Authority's right to contest the applicability of any provision of
the Social Contract as to the Franchising Authority and to contest the authority of
the FCC, the Partnership or the Partnership Entities to include the Franchising
Authority under the provisions of said Social Contract, such right being expressly
reserved.
(h) The Partnership, or any entity acting by, through, or on behalf of the Partnership
shall not contest the Franchise Authority's authority to impose these additional
conditions on the consent granted herein.
Section 4: , This ordinance shall take effect for purposes of the Transfer and the
Change in Actual Working Control only upon the Closing of the Contribution Agreement and
upon the filing with the City Clerk a written statement duly executed, in the following form:
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40 To the Honorable Mayor and City Council of the City of Baytown, Texas:
For itself, its successors and assigns, Texas Cable Partners, L.P., a
Delaware limited partnership duly authorized to do business in the State of Texas,
hereby:
1. accepts Ordinance No. 8172, dated January 22, 1998, and Ordinance No.
8113, dated October 23, 1997, and agrees to be bound by all of their terms,
conditions and provisions;
2. agrees to be bound by the terms, conditions and provisions of City of
Baytown, Texas, Ordinance No. — (this ordinance); and
3. assumes all of the obligations and liabilities of TCI Cablevision of Texas,
Inc., related to or in any way connected with Ordinance No. 8172,
Ordinance No. 8113, and Ordinance No. _ (this ordinance).
TEXAS CABLE PARTNERS, L.P.
Signature
Printed Name
Title
Date
This ordinance shall be deemed effective for the purposes of the TCI Change of Control only
upon the closing of the AT &T Merger Agreement.
Section 6: Notwithstanding any language in the Franchise or this Ordinance to the
contrary, the Franchising Authority's consent to the Transfer of the Franchise, the Change in
Actual Working Control and the TCI Change of Control, all as provided herein, shall not be
deemed to expand the rights and privileges specified in the Franchise to include the right and
privilege to provide basic local telecommunications service or local exchange telephone service,
as such terms are defined by §51.002 of the Texas Utilities Code (the Texas Public Utility
Regulatory Act), with the Franchise Authority without having first obtained a separate franchise
from the Franchise Authority to provide such service; provided that the Franchising Authority is
not expressly prohibited from requiring a franchise for such service by federal or state law.
Section 7: This Ordinance shall have the force of a continuing agreement with
Franchisee and the Partnership.
® Section 8: If any provision, section, exception, subsection, paragraph, sentence,
clause or phrase of this ordinance or the application of same to any person or the set of
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circumstances, shall for any reason be held unconstitutional, void or invalid, such invalidity shall
not affect the validity of the remaining provisions of this ordinance or their application to other
persons or sets of circumstances and to this end all provisions of this ordinance are declared to be
severable.
INTRODUCED, READ and PASSED by the affirmative vote of the City of Baytown this
the 12`h day of November, 1998.
ATTEST:
L� z� "e=�R
EILEEN P. HALL, City Clerk
APPROVED AS TO FORM:
ACIO RAMIREZ, ., City Attorney
c:klh 1171CityCouncil\ Ordinances \TCI Trans fe rOrd i nance. 110698.Clcan
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X& C
PETE C. ALFAR , Mayor